Fintech startup Bitpanda, is embracing the principles of traditional finance (TradFi), by allowing crypto investors access to traditional investments such as natural resource commodities like gas.
Bitpanda wants to give its users the opportunity to profit from short-term price swings in more conventional instruments like oil, natural gas, and wheat by including commodities in its list of feasible investment possibilities.
The distinction between traditional finance (TradFi) and decentralized finance (DeFi), according to Bitpanda CEO Eric Demuth to Cointelegraph, is getting increasingly hazy every year as a result of investor demand.
“People want to be able to trade multiple asset classes simply, safely and conveniently, and TradFi is catching up to that idea.”
There are lessons to be learned about what benefits consumers the most in both financial spheres. In terms of accessibility, TradFi is taking notes from DeFi, while in terms of risk reduction, DeFi may learn from traditional financial processes.
“TradFi has focused on expanding its accessibility, and that is driving a convergence. There is still some way to go before [it] can claim to have the same level of usability and accessibility offered by fintechs.”
With over 300 million crypto users estimated as of this year, traditional and DeFi traders are certainly headed for a compromise.
Opening up trading opportunities to assets like commodities on a digital asset exchange may also act as a doorway for crypto investors to traditional instruments as large institutions around the world began to recognize the potential of cryptocurrency investment.
“Crypto investors tend to be very involved in tradable markets. They also appreciate the simplicity offered by platforms that allow them to make quick and easy investments into multiple asset classes.”
Platforms may be able to match the accessibility and simplicity of crypto trading, according to Demuth, but investment opportunities increase with listings that incorporate assets from TradFi.
However, he also made clear that in these situations, a focus must be given to education about the benefits and drawbacks of each asset within the context of their position in the financial world.